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SLAVA RUBIN TOOK 93 REJECTIONS BEFORE GETTING FUNDED

INDIEGOGO.COM WAS A CROWDFUNDING PLATFORM BEFORE THE WORLD UNDERSTOOD WHAT THAT MEANT

February 13, 2019

By Shamindra Kulamannage

14 min read

Slava Rubin is a co-founder of Indiegogo.com, a crowdfunding platform that connects people and ideas with financial backers willing to fund those. However, it took Rubin and his co-founders three years of trying and 93 rejections before they were able to raise money to scale the product.

In Colombo recently for the launch of an accelerator and co-working space, Rubin took time to meet Echelon for an interview. He discussed the story of Indiegogo.com, its early years and what it takes to be a disruptive entrepreneur.

Crownfunding is no longer just a nice-to-have, but a must-have in the fabric of a developing economy.

What was that pivotal moment that led the founders to zero in on this idea for the world’s first crowdfunding platform? Slava Rubin: It was at a moment when we were sharing our respective stories – I was trying to start a charity to raise money for Cancer research because my dad died of Cancer, so I was using Myspace, email and Paypal to do so; my friend Eric who went to business school was trying to raise money as a junior board member for his theater company; and Dani was an investment banker, who was kind of the gatekeeper to getting money for films. We realized that we were all kind of doing the same thing, but for different purposes. So we were wondering if there was some sort of platform or a website where we could do this more efficiently – YouTube for content, eBay and a few other platforms on the internet came to mind. We thought, very naively, that if the internet was supposed to democratize everything, why hasn’t it democratized access to capital? So, we decided to create a platform to do just that.

Why do you say naively? Rubin: Naively because it’s a huge undertaking to try to change the financial services industry. We were just three people with a little idea, actually, with a big idea starting small, and thinking “hey, maybe we can make a dent in the world”. If we knew how hard it was, we would have probably stopped even before we tried. But when you have a little naivety and are almost too young to know how hard it could be, you just start doing it, and before you know it, some positive things would have happened.

But it wasn’t so smooth either, right? Rubin: Oh, not at all. We got rejected by 93 venture capitalists (VCs) consecutively and the market crashed in the fall of 2008. We started in January 2008, quickly ran out of money, and had to figure out how to stay afloat and keep moving forward, without making an income. Our product wasn’t sky rocketing right out of the gate. Yet, it was a massive success eventually. There were a lot of things to learn, a lot of questions that we needed to answer, like identifying the problem and trying to fix that; but we kept on fixing it, and before we knew it, there was progress.

Thinking back, can you identify one smart decision you made that you may or may not have realized at that time as being crucial to your success? Rubin: Well, there are quite a few things. We started our product only focusing on the film space, which confused a lot of people because they thought it was film site, but we expanded it pretty quickly to do other things. Comet Amazon started with books, so people thought we were a book company too. So it was important for us to move beyond just films. I think a really important decision we made was to stick together on any decision. Also at the start, we put too many action buttons on the website, because we were trying to capture the audience and have them coming to our web for functionality. But this confused the customer as well, as they didn’t know what to do first. So, we removed lot of the options and left just one: the funding option. In the early days, we were also proud about how scalable our website was, as we didn’t need a sales pitch to acquire customers. We didn’t talk to people, saying “Hey, you want to use Indiegogo, I think you might like it.” We let the website talk for itself. But eventually, we changed that and the website started to do sales by actually getting people to understand how it works and see if they wanted to use it, which was a really big adjustment.

NOW, WE ARE AT A MORE MATURE PHASE, WHERE WE ARE STILL TRYING TO INNOVATE, BUT ALSO CONTINUING TO BUILD ON WHAT WAS ESTABLISHED

In your view, are there any mistakes startups in general are making? Rubin: Every year has its own challenges. For a startup, in its early days, you need to use every option available to learn from your customers. Usually, it’s either about making something or selling something, and too many people get caught up in doing just those two things.

You talked earlier about Indiegogo having four or five options for users in the early days and how this wasn’t what users wanted. What were those buttons or options that you eliminated? Rubin: For example, there was an option to rate a project, because I wanted to find out the feasibility of a project and if people liked it. Users were also able to apply for a job on the platform by volunteering for a particular project. These just are some examples of things you were able to do. It made sense when you connected it to the project, but ideally when people have seven seconds to decide if they understand what you are showing them, it will just confuse them.

When you made this change, you had just one last shot at getting it right? Rubin: I think the lack of cash required us to be creative, because either we were going to figure out a way to survive or we were going to die. In figuring out how to survive, we couldn’t just keep doing what we were doing because it wasn’t working; so we had to figure out the issues and simplify everything.

This was 10 years ago, and a lot has happened since. If you had to solve one or two things right now, what are those big items? Rubin: It’s different now than in our early days. In the early days, with Indiegogo, we just had to survive. We just had to have something that fit the product market, have customers use it and say they liked it, and that was enough. Then we started getting more traction: we raised $17 million in venture capital and were hiring incredible people, it was all about building a team. Now, we are at a more mature phase, where we are still trying to innovate, but also continuing to build on what was established. So, I think it’s about being proactive, making sure customers are getting what they want and retaining the best people.

What are the next level challenges for Indiegogo? Rubin: Right now, we’ve evolved into having enterprises wanting to work with us. Some of the largest enterprises in the world, like Gillet and Lego, have approached us to figure out innovative ways to bring new products to the market. We’ve always been working globally, but more recently, we’ve focused on China, our fastest growing market for entrepreneurs, so it’s very exciting. However, we will continue to figure out how to create new products and new revenue streams from this ecosystem that we built.

You were a pioneer of crowdfunding before we in Sri Lanka even understood the phrase. Is there an opportunity to make crowdfunding more relevant in a country like Sri Lanka or India, where income levels are low and markets are facing different challenges to the US? Rubin: Crowdfunding can work in any country, and in any vertical. It can work for all kinds of products or services, or ideas. It’s really just a matter of whether or not there is an audience that wants to fund that idea. I think one of the reasons it has worked so far in the US, or how it scaled globally, is because it requires some infrastructure to be in
place: like having the internet working at a certain speed and proper banking infrastructure so people can pay for things online. These are some of the important things that are necessary as a foundation, but creative energy obviously tops the list.

The payments infrastructure and the regulations structure are weaker here. Are there any conditions that you seek before moving into a market? Rubin: In general, we don’t move into countries. If it happens organically, based on the organic data we just scale it up. That’s what happened with China. Chinese entrepreneurs were coming to us wanting to use Indiegogo. We saw it happening organically, so we kept investing in it. We didn’t actually, five years ago out of nowhere, say that we are going to build a presence in China. It was already happening organically, and we kept iterating on it.

If you look at South Asia or India, what would someone who wanted to be on the Indiegogo platform need to do to make an attractive enough pitch for your global funding base? Rubin: The important thing is that you know how to pitch it so that people will like it and an audience will care about it. If you are a smart, experienced entrepreneur that can pitch a proposal that people can believe in, it doesn’t matter what country you are in. You just need your own momentum. It’s also important that you can get the ball rolling. For example, we have lots of international projects on the platform that raise a bunch of money.

When you look back, what do you think potentially made you successful? What really worked out for you? Rubin: Maybe the ball fell on the right place and things worked out a few times. But I think persistence in always looking to solve the next problem, not giving up, being passionate about the vision, and knowing that short-term results are not the most important thing are important. I also think that we felt like we were walking towards the future as opposed to just trying to make money in the moment. And we were never content with what we had, so we were always trying to improve, which is how we were always able to stay relevant.

I don’t really have a secret as to how things worked out. Even for myself, I have recently started a venture fund, and we raised $30 million, which I’m investing in early stage startups based in New York. So I am always looking at ways to advance myself, and that’s how I’ve always looked at leading Indiegogo.

Give us an example of persistence. Rubin: It’s as simple as 93 VCs in a row saying no to us, but I just kept on going. I even had a spreadsheet, not because I wanted to track my rejections, but to track my investor follow-ups, so I can someday look back and think, woah, I got rejected by a lot of people.

So what kept you going? Rubin: It just goes back to my point about how you get to this level: you just have to believe in what you are doing and not expect short-term results to make you happy. Often, short-term results won’t even come. For example, if you think ‘I will fix this feature and get a million users’ or ‘if I fix this marketing thing, we’ll get a million dollars’, or ‘if I hire one person, he is sure to get me $5 million’, it doesn’t always work like that. Often enough, short-term results don’t happen the way you expect, so it’s easier to give up. That’s where you are basing your judgement on if you should continue or not. It’s much easier to be like, evidence shows that something is not working, so I’m going to stop it and try something else. If you are working towards a long-term vision, those short-term ups and downs won’t pressure you much. But I agree that it’s hard to have that long-term vision, especially if you are in the early days.

WE’VE ALWAYS BEEN WORKING GLOBALLY, BUT MORE RECENTLY, WE’VE FOCUSED ON CHINA, OUR FASTEST GROWING MARKET FOR ENTREPRENEURS, SO IT’S VERY EXCITING

Did you have to pivot from your core vision? Rubin: The short answer is no, but it was also because our vision was so big that pivoting was a tactical concept. We didn’t have discreet tactical plans on how exactly it all had to happen. Even the point about the five buttons, you may call that a pivot, but I call it product improvement.

It must have been many years before you saw the light at the end of the tunnel? Rubin: Well, we got rejected 93 times over 3 years, and then we raised $1.5 million. This was when things really started taking off, because one of the reasons we managed to get that 1.5 is because we were actually growing. To-date, I remember that the numbers were so good that the VCs couldn’t ignore us. Before, they were saying this isn’t going to work because of A, B and C; but eventually, their opinions didn’t matter because it was facts. You can say whatever you want, as your opinion, but we could show actual data that we were growing rapidly.

At what point in this conversation with the VCs did you have a MVP (minimum viable product) in place? Rubin: Oh, we had an MVP from day one, and we were showing really good data from around the third year.

Until the first round of funding, the three of you bank rolled it? Rubin: Yeah. Till the first money came in, it wasn’t much of a bank roll as we weren’t paying ourselves and we were thin. After the first funding, it was different. We started spending money more freely, which also meant that we wasted more money, but that was more of a requirement.

So, who or what brings you to Sri Lanka? Rubin: I met Nathan (Sivagananathan) around five years ago, and he recently reached out to me because he wanted to learn about Indiegogo and crowdfunding. I try to be a nice person and do good things because he is an entrepreneur and I love that. I love anyone who is trying to create a new reality. That’s one of my favorite things. So, he told me that he was trying to create a whole accelerator and incubator space in Sri Lanka. He had been telling me about it for a while, and he finally said that he was going to launch it and he would love for me to come. I said great, and to send me all the details and I’ll work it out with my wife. My wife is a huge, huge, huge fan of tea, and with Sri Lanka being one of the homes of tea in the world, she was interested. So, even though we have two kids (a three year old and an almost 9-month old) at home, which makes it very hard to come here, she was game for it; so here I am!